“What sets ByteDance apart is its success in the social media category, which is dominated by Facebook, Twitter and Snap — all Western companies,” said Randy Nelson, head of mobile insights at analytics firm Sensor Tower.
ByteDance declined to comment on the reports. SoftBank didn’t respond to a request for comment.
Using AI to keep people hooked
ByteDance calls itself an artificial intelligence company. It uses machine learning and algorithms to figure out what people like and give them more of what they want to see.
The company is best known in China for the popular news app Jinri Toutiao, or “Today’s Headlines,” which it launched in 2012. People quickly got hooked on the app’s customized news feeds. Toutiao currently has more than 240 million monthly active users that spend on average 74 minutes per day on the platform.
ByteDance applied a similar formula to Douyin, a video app that launched in 2016.
It has Snapchat-like functions, where people can edit and add filters to 15-second videos before posting them online. The app has even spawned a phrase to describe people glued to their customized feeds: “shua Douyin” or “scrolling through Douyin.”
Going global
ByteDance had global ambitions early on. It launched its first international product in 2015, the English-language news app Top Buzz.
Flipagram is now known as Vigo, and musical.ly users were moved onto TikTok earlier this year.
ByteDance’s growing video empire has made it the world’s fifth biggest app maker, based on overall downloads, according to Sensor Tower. In the third quarter of 2018, downloads of TikTok were more than five times as high as in the same period a year earlier.
Money-making potential
Investors like ByteDance because its hundreds of millions of users attract a lot of advertising money.
ByteDance declined to disclose how much revenue its apps generate, but a source familiar with the company said Toutiao alone pulled in 20 billion yuan ($2.9 billion) in China last year.
The video apps are even more lucrative because they attract a lot of users in their teens and 20s. That’s what makes ByteDance such a threat to more established Chinese social media platforms, according to Xiaofeng Wang, an analyst with research firm Forrester.
“Consumers have limited time and attention. [Whoever] wins consumers especially younger generations will win advertising dollars,” she said.
ByteDance also makes money through revenue sharing deals. People on TikTok, for example, can buy digital coins to give to other people on the app — like throwing money in a performer’s tip jar. ByteDance takes a cut of those earnings.
Run-ins with the government
The startup’s meteoric rise has caught the Chinese government’s attention.
Like Facebook and Twitter, ByteDance is also battling fake news and inappropriate content.
ByteDance reacted by issuing a public apology and promising to add thousands more employees to review content.
“Our product took the wrong path, and content appeared that was incommensurate with socialist core values,” Zhang said in a social media post at the time.
Source : Nbcnewyork